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EXPERT SYSTEMS FOR MANAGEMENT OF FINANCIAL REGULATIONS: APPLICATION TO WORKERS' COMPENSATION INSURANCE PREMIUM AUDITING AND EVALUATION

Alexis Koster (Associate Professor, Information Decision Systems Department, San Diego State University, San Diego, Ca 92182)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 May 1989

121

Abstract

Financial expert systems have been developed in the past few years for applications such as credit assessment, portfolio management, and insurance underwriting. The decision making process of the experts in these application domains to a large extent relies on intuitive knowledge acquired by these experts after many years of practice. Eliciting and formalizing this knowledge is a critical phase in the design and development of such expert systems. This paper describes a prototype expert system for auditing and evaluating workers' compensation insurance premiums. This system differs from the abeve expert systems in that most of the experts' knowledge is explicitly accessible as regulations in procedures and manuals. This expert system is an instance of what can be called an expert system for regulation management (ESRM). The main role of the expert in the development of an ESRM is to explain regulations. The expert system presented here exhibits two features critical to the effectiveness of an ESRM: (i) an appropriate representation of complex regulations, and (ii) the capability to incorporate frequent changes to regulations quickly.

Citation

Koster, A. (1989), "EXPERT SYSTEMS FOR MANAGEMENT OF FINANCIAL REGULATIONS: APPLICATION TO WORKERS' COMPENSATION INSURANCE PREMIUM AUDITING AND EVALUATION", Managerial Finance, Vol. 15 No. 5, pp. 7-18. https://doi.org/10.1108/eb013624

Publisher

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MCB UP Ltd

Copyright © 1989, MCB UP Limited

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